Average value for Wellington tops $600,000 as the capital's housing market continues to rise faster than Auckland

Date: 03 May 2017

The latest monthly QV House Price Index shows that nationwide residential property values for April increased 11.1% over the past year, which is the slowest annual rate of growth since July 2015. Quarterly value growth plateaued with a 0.0% change over the past three months. This means nationwide average value remains at $631,147 which is 52.3% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 8.7% and values are now 27.2% above the 2007 peak. 
Residential property values across the Auckland Region increased 10.7% year on year which is the slowest annual rate of growth since December 2014 and quarterly growth decreased by 0.4% over the past three months. The average value for the Auckland Region is now $1,043,830 and values are now on average 91.0% higher than the previous peak of 2007.  When adjusted for inflation values rose 8.4% over the past year and are 59.4% above the 2007 peak. 
QV National Spokesperson Andrea Rush said, “Nationwide quarterly value growth has plateaued over the past three months as the housing market continues to be constrained by the latest round of LVR restrictions.” 
“Values dropped in parts of Auckland and Christchurch over the past quarter and the rate of value growth has slowed considerably in Tauranga and Queenstown.”
“Meanwhile, the average value across the Wellington region has now topped $600,000 however the rate of value growth there is also continuing to slow but market remains buoyant particularly in more affordable parts of the region such as Porirua and the Hutt Valley.”
“The Wairarapa and Masterton markets are now seeing strong value growth as a flow-on effect of recent growth in Wellington values.” 
“The Dunedin market also continues to rise steadily and Hamilton values are now increasing in the city again after a recent downward trend that followed the new loan restrictions.” 
“Nationwide sales volumes have continued to be relatively weak and despite sales picking up in March as compared to February; they were at the lowest level for March since 2014.” 
“The latest CoreLogic Buyer Classification data for Quarter 1, 2017 shows while the value of lending to investors (as reported by RBNZ) has dropped for several months, their 39.0% share of all residential sales remains propped up by cash investors not requiring a mortgage. This was at the expense of the first home buyer share which slipped marginally from 21% in 2016 to 20%, and the share of sales to those moving home which has seen the greatest decrease is down from 30% to 27%.” 
Values across the Auckland Region are continuing to show a slight drop of 0.4% over the past three months. Values on the North Shore, Waitakere, in parts of Manukau and Auckland City central suburbs decreased during the quarter, while values continued to rise in Papakura, Franklin, Rodney and Waiheke Island.
QV Auckland homevalue Manager, James Steele said, “Demand is still down as tougher lending restrictions continue to make it difficult for buyers requiring a mortgage to obtain finance for their purchases.”
“However, cash buyers and those who are able to obtain funds, or are able to use equity built up over the past five years of substantial growth, are out hunting for good deals.” 
“Well presented properties in decent locations are still selling well although it’s taking a little longer than when the market was very hot and properties which are in poor condition or have issues are sitting around for a lot longer if vendors are unwilling to negotiate on price.”
“First home buyers continue to prop up entry level areas, but appear to be favouring property which is ready to move in to.“
Hamilton home values are rising again with values up across all parts of the city over the past three months. Overall values for Hamilton city have risen 14.4% year on year and 1.4% over the past three months and they are 49.1% higher than the previous peak of 2007. The average value in the Hamilton is now $538,832.
QV homevalue Hamilton valuer, Stephen Hare said, “The Hamilton city market is still experiencing steady demand similar to that seen during the first quarter of the year, with levels of interest not as a strong as late last year but homes are still selling.”
“With the heat now having come out of the market, auctions have become the less attractive course of action when selling a property with more properties being passed in at recent auctions.”
“In turn listing prices or negotiations are becoming the more desirable option with people less inclined to take that risk of selling by auction in the current market. This also enables first home buyers to do more due diligence once a contract has been entered.”  
“There are reports that there is a shortage of rental property available in Paeroa, Thames and Matamata.”
“The key driver of this is new home owners/occupiers buying up portions of rental stock and this pressure has in turn created more demand for rental properties, thus driving prices up steadily. This is becoming a growing trend throughout small towns within the Waikato region.”
The rate of value growth in the Tauranga market has been slowing since the introduction of the LVR restrictions late last year and this trend has continued over the past three months, with value up just 0.9% over the past three months. Values there rose 17.5% year on year and they are now 40.9% higher than the previous peak of 2007. The average value in the city is $678,643. Meanwhile, the Western Bay of Plenty values have increased 15.9% year on year and 2.7% over the past three months. The average value in the district is now $590,783.
QV homevalue Tauranga, Registered Valuer, David Hume said, “Agents are reporting more normalised activity in the sub $700,000 bracket. 
“Well located properties over $1,000,000 continue to be in good demand. “
“Some agents are even reporting a softening of values for investment properties which is likely to be due to some investor’s finding it more difficult to gain finance to purchase with the higher deposit requirements.”  
The QV House Price Index shows values across the Wellington region continued to rise up 21.2% year on year and 3.4% over the past three months and values are now 32.2% higher than in the previous peak of 2007. The average value across the wider region there has now topped $600,000 and is $602,230. 
Wellington City values rose strongly over the past year up 20.8% and 3.1% over the past three months and the average value there is now $724,176. The Hutt Valley is still accelerating with Lower Hutt values up 25.1% year on year and 4.3% since February; Upper Hutt is up 26.6% year on year and 2.8% over the past three months. Porirua values are up the most over the past three months rising 5.5% since February and 24.4% year on year. The average value there is now $510,853. Meanwhile, values on the Kapiti Coast are also continuing to rise up 20.9% year on year and 1.8% over the past three months.
QV homevalue Registered Valuer, David Cornford said, “Value growth has remained fairly consistent over the past month and Porirua has again seen the greatest value growth in the region, followed by Upper and Lower Hutt.”
 Value growth in these areas is supported by a strong first home buyer presence in the market while the Wellington City has market has slowed slightly as first home buyers continue to turn to Porirua and the Hutt valley as they provide a more affordable option.”
“The number of listings has increased and this is providing buyers with more choice which has taken some of the heat out of the market. Also, investors requiring finance are less active in the Wellington city market since the introduction of LVR restrictions last year due to the higher deposit required.”
“This has resulted in the average number of days to sell increasing and more buyers are now placing conditions on contracts.”
“On the Kapiti Coast, good sale prices are still being achieved across the region with the largest percentage increases occurring in Waikanae Beach and Otaki.”
“There are good turnouts at home homes with a large proportion of interest coming from outside the region, in particular Wellington and the Hutt Valley.”
“The market for investors on the Kapiti Coast remains strong despite the introduction of higher deposit requirements.”
“Strong demand and high sale numbers for the Wairarapa region is also resulting in values continuing to rise there and there are now fewer entry level Wairarapa properties, favoured by investors and first home buyers, available and agents are being rushed off their feet with lots of quick sales occurring.” 
Home values decreased slightly over the past three months in most areas of Christchurch City with the exception of the Waimakariri District and the Christchurch – Hills suburbs where values were up 1.6% and 0.8% respectively since February.
Christchurch City values increased 1.4% year on year and they are now 30.7% higher than the previous peak of 2007. The average value in the city is now $495,855. 
QV homevalue Christchurch, Registered Valuer Daryl Taggart said, “While there is still plenty of building going on around Christchurch, the residential market does appear to be flat lining in terms of value growth.”
“Currently there are not many drivers at play in the Christchurch housing market with less demand meaning that in general properties are taking longer to sell that in previous years.”
“First home buyers are still reasonably active and given that entry level properties in Christchurch are more affordable than the likes of Auckland and Tauranga.” 
The Dunedin market continues to be buoyant with city home values rising 17.0% year on year and 3.5% over the past three months and values are now 29.9% above the previous peak of 2007. The average value in the city is now $371,739. 
QV homevalue Dunedin, Registered Valuer, Duncan Jack said, “Demand from buyers remains strong.”
“There are reports of an increase in unconditional offers which may be an indication of buyers’ current eagerness to secure a property amidst strong competition.”
“Properties continue to sell quickly – particularly those within the mid-value ranges and value levels appear to be continuing to strengthen.”
“Sales numbers have increased the last 2/3 months since dropping off over the Christmas and summer break.”
Nelson home values continue to see good value growth rising 16.9% year on year and 3.8% over the past three months. The average value in the city is now $527,422.  Values continue to rise in the Tasman District up 16.9% year on year and 4.7% over the past three months. The average value in the district is now $521,575. 
QV homevalue Nelson, Registered Valuer Craig Russell said, “Strong prices are being achieved in outlying small townships which typically lag strong value level growth in the main centres.” 
“Buyers at this stage of the property cycle often widen their purchasing parameters due to affordability and the trade-off of commuting.”
“Motueka values have increased considerably of late partly due to the relative affordability of property there compared to Nelson and Richmond.” 
“Investor activity appears to have cooled off as LVR restrictions and implications around “P” contamination may be one factor concerning investors in the local market.”
“The majority of buyers are more cautious with their purchasing decisions given buyer’s reduced tolerance levels for debt and possible increased debt servicing from increased interest rates on the back of strong inflation figures.”  
Hawkes Bay
Napier values are up 17.2% year on year and 1.5% over the past three months. The average value in the city is now $425,484 and values are now 25.0% above the previous peak of 2007. The Hastings market continues to see strong value growth up 22.8% year on year and 4.2% over the past three months and the market is now 31.1% higher than 2007. The average value there is now $408,510.
QV homevalue Hawkes Bay, Registered Valuer Michelle Drinkrow said, “The Hawkes Bay residential property market is continuing to see plenty of activity and continued growth with good value levels being achieved in terms of sales prices and demand remaining high.”
“Demand is exceeding supply on the market at the $1 million plus range around Havelock North with some of the demand coming from out of town buyers relocating to the Hawkes Bay due to the lifestyle and affordability offered in the region.”
“Investors appear to be active still particularly at the low-end of the market around areas such as Flaxmere. We are seeing two distinct types of buyers in the investment market: locals who are educated in the quality of the area and out of town investors who are happy to pay a little more as long as the numbers stack up.”
“There still remains a lack of vacant land available and builders are reporting high levels of activity. House and land packages are in good demand with some buyers prepared to pay a premium for good quality fit-out over basic style properties.”
Provincial centres
In provincial areas of the North Island, regional areas in relative proximity to Auckland continue to see values accelerate with the Kaipara and Thames Coromandel Districts now seeing value growth of more than 6.0% over the past quarter and more than 22.0% year on year. Opotiki in the Bay of Plenty has also seen values jump rising 14.9% over the past three months and 26.3% year on year. 
The only areas in the North Island to see values decrease over the past three months were parts of Auckland, Stratford and Waitomo. 
In provincial areas of the South Island, the MacKenzie District again saw the highest percentage growth with values up 8.3% since February and while quarterly growth in the previously hot Queenstown market slowed to 0.9%.
The only area in the South Island to see values decrease over the past year was the Grey District where values were down slightly by 0.1% and over the past quarter values dropped in parts of Christchurch as well as the Grey, Hurunui, Selwyn, Ashburton, Timaru, Waimate, and Clutha Districts.  

Tags: Property, CoreLogic, Auckland, Housing, Real Estate, Property Market, Wellington House Prices, Property Values, Homes Values